BU247 Lecture Notes - Fuzhou, Sunk Costs
Document Summary
Make or buy: would it be better for us to buy it from outside party or better for us to make it ourselves. What are the costs to make it vs to buy it. If you choose not to make it what are the avoidable fixed costs that you would need to take into. Consider the external costs (shipping, border cost, and quality control) The company who buys the product usually wears more damage if the product they purchase is broken. Have to consider the revenue that you would loose from not making the product. Quality issues with the product, supplier needs to live up to our expectations. Do not outsource you are better off making it yourself. 000: ignoring remodeling costs, by how much will the bar segment margin have to increase for the grill"s income to be at least as high as it is now. The consideration of sales effecting sales (some customers may come for billiards)
